A Decade Without Fed Hikes Comes Into View for Bond Investors
- Amid tame inflation, Brandywine sees no hike through 2028
- Developing-country debt, spread products have appeal for some
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Bond managers are starting to contemplate the prospect of another decade without a Federal Reserve interest-rate hike.
Forecasting that far out may seem like a fool’s errand. But the central bank’s inability to push inflation sustainably above its 2% target, even after three 2019 rate cuts amid the strongest job market in 50 years, gives that outlook more weight, they said. The scenario rejects the notion that last year’s easing was a sort of insurance move that could be quickly reversed under an improving economy.